How Nearly Going Broke Taught Me The Value Of Niche Marketing

By André Anthony

If you want to learn how effective Niche Marketing can be, I
suggest you "don`t" take the route I did.

Back in 1983 I started a company offering general Electronics
Subcontract Assembly services to just about anyone who made
Electronic products.

By 1985 my company was teetering on the brink of bankruptcy and
I was perilously close to losing my home because of a large
overdraft pledged against it.

Why did this happen?

Well Electronics Subcontract Assembly is a huge, highly
competitive market place with lots of heavy hitters. Being a
little naive at the time, I thought that my little three man
company could carve out a big enough slice from such a huge
market to make a very comfortable living - I was dead wrong.

We did get work, but only the jobs the big boys didn`t want.
The work was labour intensive and even with our tiny overhead
we couldn`t make enough profit to sustain the business
adequately. We could never get the big, lucrative contracts
because we weren`t considered big enough to handle them.

By December `84 I was desperate. Sales for the previous four
months had been abysmal and cashflow almost non-existent. My
Bank Manager was on my back demanding that I reduce the
business overdraft or he would call it in. My suppliers were
baying at my door to be paid. As if that wasn`t bad enough,
during the first week of 1985 my biggest customer suspended
production for six months on a games gizmo we were making for
him.

Things were so bad I was seriously considering bankruptcy to
get out from under this financial nightmare. Fortunately I`m a
bit pig headed about giving in too easily so despite all the
problems I hung on, and I`m glad I did because fortune
suddenly smiled on me.

What happened?

A couple of weeks into 1985 a business acquaintance came to see
us with a sample cable and asked if we could make 5 up for him.
The cable was for an IBM PC. At the time I knew nothing about
making cables and even less about PCs, but I had his sample to
work from so I took the job.

When our now customer came to collect his finished order, he
mentioned that there were a few other Dealers in the PC market
who would probably be interested in having us supply them with
these cables - he even gave us a mailing list.

I was more than a little sceptical, I have to admit, but I had
nothing to lose so I went for it. I wrote a short, snappy
sales letter, scraped together the money, mailed out to the
100+ dealers on the list and crossed my fingers.

48 hours later we had our first order for 10 cables, within 7
days we had 11 more orders for 10 cables each.

That one small mailing brought us an amazing 12% initial
response - and it just kept going from there with week after
week of repeat orders.

Pretty soon after that, my wife Maxine joined the business and
set up a telephone sales desk and customer service system. By
that time we were averaging about £1000 a week and that was
from just the one cable type.

At that point I dumped the subcontract work and focussed on the
cable business.

Once Maxine took over the sales function she immediately
followed up with the companies who hadn`t responded to our
initial mailing. That brought in another 26 new customers.
Within six months we were supplying most of the major Dealers
and Distributors in the then burgeoning PC market and our
cable sales had quadrupled.

Inside a year in this niche business we were selling thousands
of computer cables of all descriptions, including highly
lucrative custom formats, and we were being asked to provide
advice on how to design cables for specific applications - we
had arrived - we were now the acknowledged experts - customer
loyalty rocketed and by 1988 our turnover reached £400,000+
with gross profits of 50% or more.

Now I`m the first to admit that luck played a hand in turning
my company`s fortunes around, but the experience taught me my
most valuable lesson in business - you have to focus on a
specific, under-served market niche if you want to be really
successful in business.

I have applied this premise to four other businesses since then
and, with one exception, all have been successful.

My advice? Find yourself a small, focused market niche (the
Internet is full of them) where you can carve a reputation for
yourself and become an expert in the field - like I did.

Paul White is a 42 year old former teacher. He now helps people
all around the world to become wealthy online. Whatever you
are selling, visit the popular site: http://www.profitmountain.
com (http://www.profitmountain.com) and if you subscribe to
Profit Mountain`s FREE wealth building newsletter, you will
also receive FREE advertising for the next 12 months! (Worth
$200!) as well as loads of other things!